Using the exogenous shock of the COVID-19 pandemic, we study how informed market participants evaluate fiscal space. Short-selling activity shifted upon the onset of the pandemic towards companies with low financial flexibility only in countries with limited fiscal space. Among these companies,...

"When you look around the world it's almost as if Thatcher/Reagan economic revolution never happened. The largest pool of wealth in the world - a global total that is twice the world's total pension savings, and ten times the total of all the sovereign wealth funds on the planet - is still...